Our apologies to our readers for the delay on getting this week’s post published. FI Guy came in contact with some kryptonite and had to pay a visit to the hospital. I’m happy to say, he is back home resting and should be back in business soon. Of course, we’re pretty sure this visit blew our medical budget for the year (thanks to our craptacular insurance). Luckily the markets are still going strong so hoping that will offset things for this month. And without further ado, for your reading pleasure, here’s this week’s article. (And Happy Thanksgiving to all who celebrate) – FI Girl
Traditional retirement suggests a 10% savings rate is appropriate in order to live comfortably following your working years. In order to retire early however, you need to build up to and achieve a 50+% savings rate. Due to this a common stereotype of people who are pursuing early retirement is that they are so frugal that they cut out all of the fun in their lives.
Personally, I feel that we live a life of luxury and are very lucky to have what we have. We have “luxury” or “want” spending planned and built into our budgets. When spending, we look at value per dollar before making a purchase. Because we are so use to doing this, it just happens naturally.
Work is by design stressful in a lot of ways. Deadlines, emotional meetings and complex (and possibly boring) tasks need to be performed at all hours of the day and night. In return for our time, our employer compensates us in $. For us to part with that $, we better be getting something of value that offsets the upfront exchange (loss) of our time.
With that said, the “luxuries” we do plan for, we consider totally worth it. A big chunk of luxury (want) spending for us is travel. Out of our $39,000 annual spending budget, we carve out $2,500. With this fixed budget, and limited amount of time off from work, we always strive to optimize the value we get. If something feels like a rip off, it bothers both of us. And we never repeat business with a place that doesn’t feel “worth it”.
The pattern we have gotten into over the years is to take 1 to 2 week long cruises. The value per $ is very good and the upfront planning involved is typically minimal. Over the years we have built up enough cruises that we have received a lot of perks via loyalty programs which also adds value for us. Of course, I doubt we are the typical customers that the cruise marketing managers and agencies have in mind when dishing out some of these perks and deals.
For folks who are not familiar with cruising, when you book a cruise vacation, it comes as a package. As part of the base price you pay, you get the following:
1. Your room
3. Basic drinks (juice, water, coffee, tea)
4. Entertainment / Activities (movies, live shows, games, gym, pool / hot tub)
5. Multiple ports of call (places they stop throughout the cruise)
In addition to the above, there are a host of optional services you can pay for on top of the base price such as:
1. Upgrades to your room (balcony, suite, window)
2. Specialty restaurants
3. Alcohol / Soda
4. Entertainment (Casino, Spa, some specialty activities)
5. Cruise line sponsored tours
It’s quite easy for a typical cruiser to have such high optional spending, that it ends up more than doubling the price of their cruise vacation. The last few 14 day cruises we have taken, we were able to come out with ZERO additional optional spending and we had an amazing time.
So let’s break it down:
We are perfectly happy with the cheapest room on the boat. This is usually an interior stateroom which means no window. We spend most of our time outside of the room, so why do we care if its slightly smaller or doesn’t have immediate access to a balcony? We can always go upstairs to get into the same pools and bask under the same sun as everyone else. So if you don’t mind not having a window then booking an interior stateroom is usually the way to get a great deal. We have however seen a few times where the price of an exterior stateroom has been the same or less than an interior, so keep an eye out for that as well.
So you are telling me the steak in the main dining room is so inferior that you would rather pay an additional $30 (or more) per person to make a reservation to have a “special steak” in another closed off dining room? Really? There are so many options for fancy pants food in the white tablecloth “included food” dining room. I don’t get it. I’ll pass.
We kind of cheat on this one since we already don’t drink alcohol and stopped drinking soda years ago. We just stay hydrated with lots of free water and juice throughout the day. If we did want these things however, the loyalty programs for return cruisers give free drinks for four hours each night which would be more than enough for someone on a budget. There are also a number of appreciation events for first time and return cruisers which usually offer some type of free alcoholic beverage.
I don’t play the lottery at home so why would I play at a low odds casino at sea? Like being pampered at sea? A spa bill could rack up hundreds of dollars. I never felt it was really worth it for what you get but if you are going to splurge, hold off for a port day and you will get a discounted service. If you are a return cruiser you could also get up to 20% off on one service. But really, there are so many other options that are “free” that we have never been bored enough to resort to any paid activities.
We usually do a free “online” / “self” guided walking tour of the same thing folks pay lots of money for to follow some dude around. We only sign up for the cruise tours when we can’t do the same thing cheaper on our own.
Ultimately, when you think about it, there is a lot of value in taking a cruise vacation if you can be flexible and know how to find a good deal.
Our last cruise vacation, for example, came in below budget and lasted 17 days. We flew to Florida, took a 14 day cruise to Spain, spent 3 days in Spain then flew home all for $2,498 ($147 per day). Here’s the breakdown of our costs:
- Cruise: $795 per person ($606 pp base cruise price + $189 pp for tips)
- 14 day cruise
- Included our room, all the food you could possibly want to eat, entertainment, 5 ports of call and tips for staff
- Tips were approximately $13 per day pp for room steward and dining staff.
- Lodging in Spain: $74 per night
- Flights: $329 per person
- The cruise left out of Florida. We found flights for $99 pp on JetBlue. Free drinks and snacks for all!
- We found ridiculously cheap flights back from Spain for $230 pp on Norwegian Air by traveling mid week. Since everything is ala cart, we made sure to pick up a few bottles of water and snacks before hopping on board to bypass the crazy $4 per bottle prices mid flight. There was a Burger King in the airport where we snagged a few bottles for $1 each. Score!
- Food: $69 Total
- We ate incredibly cheap for 3 days by venturing out of the touristy areas and we’re glad we did as we ate some delicious food for a fraction of the cost of what the tourist spots were offering.
- Also, on the first day we ate a huge breakfast onboard the cruise ship before disembarking so we ended up skipping lunch and just grabbing a light bite for dinner.
- Miscellaneous: $33 Total
- This was an unexpected cost but well worth it for us. Our Airbnb host dropped the ball on letting us drop our bags off early. They unfortunately waited until the night before we arrived in Barcelona to tell us. So rather than carry all of our luggage around the city for 8+ hours, we purchased a service that allowed us to drop our bags off at a kiosk and have them delivered to any location in the city at a specified time. While we likely could have found a locker somewhere for less, since we didn’t have the means or the time to do our research we thought this was a good price for enabling us to freely roam the city for the day before check-in.
The year before this past cruise we went on a 14 day transatlantic cruise which only cost us $357 per person. While we still had to pay for flights and tips, we ended up receiving an additional $125 onboard credit which we put toward the tips for staff. It was like they were paying us to eat their food and stay on their ship. We found it you shop around and can be flexible on the dates you can find some amazing deals.
So needless to say, traveling is one area that we are both incredibly passionate about. More specifically cruising. We can’t wait to write more about this topic and to share our experiences along with tips and tricks for finding an amazing deal and “value traveling”.
So we ask you, if you could travel anywhere, where would you go and how would you travel?